The Nigerian stock market has displayed remarkable resilience, sustaining its upward trajectory amidst strong buying sentiments driven by positive government policies and monetary and foreign exchange reforms. The Nigerian Exchange witnessed a surge in buying interest following the peaceful transition of power and the new administration’s pro-market policy statements. Investors are hopeful that these policies will have a positive impact on the economy and major sectors, generating optimism as the government unveils its strategies and agenda.
The NGX All Share Index (ASI) reached a significant milestone, surpassing 60,000 points, the highest level it has reached in over 15 years. As of June 27, 2023, the ASI recorded a gain of 7.78%, closing at 60,108.86 points, a level not seen since March 5, 2008, when it stood at 66,381.20 points. Furthermore, the market capitalization increased by N4.196 trillion during the review period, closing at N32.730 trillion on June 27th.
Capital market analysts attribute the positive sentiment among investors to President Bola Tinubu’s economic decisions, particularly the changes made to Nigeria’s foreign exchange operational framework. The cleanup program initiated by the president at the Central Bank of Nigeria (CBN) has been identified as a key driver for the market’s upward movement. Market experts highlight the importance of addressing the supply side of forex to prevent potential challenges in exchange rates.
Market outlook for the future remains optimistic, with the expectation that the new administration’s commitment to resolving policy issues, including the forex framework and oil subsidy payments, will act as catalysts for a stronger equities market. Investors view the president’s statements on unifying exchange rates and rectifying FX repatriation issues positively, as evidenced by the market’s positive performance. However, analysts emphasize the need for comprehensive and overarching policy reforms from the new administration to have a lasting impact on the local bourse in the long run.